Trimming state government. With Iowa’s legislature convening in just a few weeks, Republicans and Democrats are scanning the possibilities to save a buck. We're getting Republican perspective from minority leaders Paul McKinley and Kraig Paulsen on this edition of Iowa Press.

Borg:

Less than a month, actually about 24 days now, until convening the second session of Iowa’s 83rd general assembly. The outlook bleak and challenging. It was just a week ago that the state's revenue estimating conference took still another bite from its earlier projections of sharply reduced tax revenues flowing into the Iowa state treasury. Legislators will be incorporating those new numbers into crafting a budget for the next fiscal year, and after a series of major cuts in this year's budgets, well, further reductions mean major pain. With democrats controlling both the house and the senate, today we're seeking perspective from senate republican leader Paul McKinley of Chariton, and his counterpart in the House of Representatives, Kraig Paulsen of Hiawatha. Gentlemen, welcome back to Iowa Press.

Paulsen: Thanks for having us.

McKinley: Thank you.

Borg: And across the table, two people who will be up and they’re working with you daily, I know, but up in the convening of the next session. And that's Associated Press Senior Political Writer Mike Glover and Radio Iowa News Director Kay Henderson.

Glover: Senator McKinley, let's start with you. As Dean mentioned in his opening, democrats control the house, democrats control the senate, and democrats control the governor's office. What can republicans do to make themselves relevant?

McKinley: Well, I think one of the things we can do is to point to the fact because they control both the house, the senate, and the governor's office that we are in the mess we're in, and hopefully next November we can see a change that will bring us back to some fiscal stability. That said, in the near term what we can do is continue to offer our ideas, give the ideas that we presented last year, some of which the governor finally did incorporate into some of his recommendations, and try and play a role wherever we're allowed to play a role.

Glover: Representative Paulsen, same question to you. What can you do to make yourself relevant in a state government where you're in a distinct, not just slight but distinct, minority.

Paulsen: Well, I think you're getting to see some of our relevance right now. You're getting to see some of our relevance in the governor's executive order. You're getting to see a relevance in some of the proposals that we put forward last year that are now being enacted, and that's exactly what you'll see out of republicans when we convene here on January 11.

Glover: How long will it take before you can put yourself back in a position to have influence on what state government does?

Paulsen: Well, I think we have influence today, but if you're talking about control, I think that opportunity is next fall.

Borg: What did you say, governor's executive order and you could see where you had an influence?

Paulsen: Well, for example, one of the things we recommended last year was to limit the state's vehicle fleet. The governor has now done that. One of the proposals republicans have put forth is how much publications the state is putting out. We can see he addressed that and is reducing some of that, and we appreciate him picking up some of those ideas.

Glover: Senator McKinley, you're down 32-18 in the state senate. How long will it take you to get back in control? Can you do that this year?

McKinley: Well, I don't want to put a timetable on this, but certainly with the mood of the public in Iowa, we're seeing people more upset than they've ever been. We have good candidates coming forth we would have never seen two to four years ago because they're fed up with what's going on. So, yes, I think we have a shot at it. I'm not going to make any predictions, but we have a shot at it.

Henderson: Republican gubernatorial candidate Chris Rants, one of your colleagues, Representative Paulsen, spoke at a republican fundraiser the first weekend in November and told the audience there that he had attended the state tea party convention earlier in the day and there were far fewer people at the republican gathering. What can republicans do to attract those tea party folks?

Paulsen: Well, we need to stay true to our principles. I think house republicans, I think senate republicans, we've stayed true to that in the legislature. We've said we're not going to support a budget that spends more money than comes in. We didn't and we won't again this year. The taxpayer has a seat at the table with republicans in control. I mean that's directly what those folks are talking about.

Henderson: But, Senator Paulsen, there was recently a national survey which found that the tea party label was much more popular with voters than the republican label.

McKinley: What I would tell you is that the folks that go to the tea parties are expressing is exactly what we as republicans have been expressing. They feel that government is too big, it is too out of touch, and it is increasingly out of control, and they are losing their freedom and liberty. And I believe that they have a point. So their home should be with those republicans like the house and senate republicans that are preaching the same thing.

Henderson: But, Representative Paulsen, those people are not home in the Republican Party yet. If you look at voter registration numbers, that's very clear.

Paulsen: I think one of the things that they're waiting for is to make sure that we're true to doing what we're talking and saying we're going to do. And we're going to have an opportunity to prove that up over the next three or four months.

Glover: And, Senator McKinley, the question to you is the polling I’ve seen says if republicans trod down that path, they're going to become a permanent minority, that you have to broaden your base. How do you address that?

McKinley: Polling was just released today that showed that nationwide the democrats are losing steam tremendously because people recognize that what the democrats have done is to increase spending to grow government, and people really believe that their liberties and freedoms are threatened due to the huge expansion of government.

Borg: Representative Paulsen, Mike used the word relevance here a moment ago, and I’ll use it again. What issue -- if you could pick just one issue that you know will be coming up in the next legislative session, where can republicans be most relevant? What is the issue?

Paulsen: Well, I think the biggest issue coming and the place where we're going to spend the bulk of the time is on the budget, and we will be relevant there.

Borg: How? You don't have numbers.

Paulsen: We will continue to offer up ideas. Some of those will get incorporated. Some of them won't. I understand that. But that's one of our roles is to make sure that we provide those alternatives. We'll provide alternatives when it comes to -- look, house republicans are focused on three things: jobs and the economy; making sure we pass a budget that doesn't spend more than what we bring in; and we're going to make sure that we -- I lost my -- oh, that we get control and the property taxpayer has a seat at the table. We're extremely frustrated and disappointed with what's going on in property taxes right now.

Borg: Senator McKinley, one issue on where you will be most relevant -- and he's already said budget and perhaps you agree with that, but be a little bit more specific.

McKinley: As we face this Christmas season, people in Iowa are sitting around their tables wondering can we pay the heating bill, can we buy presents for the kids, how are we going to make the mortgage. We have a serious problem in this state with employment, as does much the rest of the nation. Look, I know you can create jobs in a recession. I've done it back in the early '80s. If we do the right things in this state, we can create jobs, but we have to get out of the notion of overspending and raising barriers to --

Borg: You're telling me the problem, but you're not telling me where you're going to be most relevant on which issue.

McKinley: We will continue to give the democrats sound, firm ideas on how you can go about creating jobs and remove barriers. We offered legislation last year. We will continue to offer our ideas and suggestions.

Glover: Representative Paulsen, one of the issues that drives the republican base are what we refer to as social issues. I'm thinking of gay marriage, abortion, things like that. That tends to drive the republican base. Can you convert that into majority issues, because the polling I’ve seen says if you focus on those kinds of issues in a recession when people are worried about their jobs, you lose?

Paulsen: I don't think there's any question that the hottest issue in that realm right now is the question of how you define marriage. I don't think there's any question that Iowans believe they should have an opportunity to resolve this split between the legislature and what it says in the code of Iowa and what the Supreme Court has decided. And there is no question that republicans are ready to give them the opportunity to vote.

Glover: And are you going to push that this session?

Paulsen: If there's 51 people who are ready to debate that issue, we'll debate the issue.

Glover: Senator, same question to you. Those social issues tend to drive the republican base, but polling shows those social issues are minority issues. How do you convert them to winning the majority?

McKinley: The republican base is multifaceted. They look at more issues than just that, but that is an important issue and it contributes to the sense that government is out of control. To have mike Gronstal and pat Murphy stand in the way of Iowans having a vote on this issue is unconscionable. We need to have the final arbiters of the decision of what defines marriage, regardless of how they want to define it, they need to have a vote.

Glover: Do you have a chance at having that come up this year, or is it just off the table?

McKinley: We will certainly give the democrats the opportunity to do the right thing and side with the people in Iowa.

Glover: Realistically can you?

McKinley: We'll see.

Henderson: Democrats at the national and state level have sort of tipped their hand as to what their message will be to counter what republicans say in 2010, the election, and that is that republicans are the party of no. Representative Paulsen, how do you counter that argument that republicans are the party of no when you're saying we need no more spending, we need not to do certain things?

Paulsen: Well, I mean it's a completely hollow argument. It is the republicans who have put forth an agenda and invited you all to our different proposals. We've done that jointly and we'll continue to do that. We've put forth -- I think we've four different programs and we'll do one more on jobs and the economy before the start of session.

Henderson: Does negativity sell? Senator McKinley, have you about siting surveys which indicate Iowa is a terrible place in which to do business but yet market watch, which is part of the Wall Street Journal, this week said Des Moines was the best city in which to do business in the country.

McKinley: Well, Des Moines is a great city and I applaud them for this award. What I would tell you is that had the governor and the democrats and the legislature said no a few more times we would have not found ourselves in the financial mess we're in. That said, we have offered numerous proposals to get this economy going and in a positive direction, and they've sent and those proposals have been ignored.

Glover: Representative Paulsen, let's look forward to next year's election. If next year's election could be about one singling issue, what would it be about?

Paulsen: I think it's about jobs in the economy.

Glover: And how does that work for republicans?

Paulsen: I think that that works well for republicans because if you look at the bulk of the things we have spent time on and talked about overt course of the last three years, most have them just are barriers and make it harder to be an employer in the state of Iowa. Republicans are ready to do things that will encourage employers to invest in state.

Glover: Senator McKinley, it's a question I’ve asked a number of people on this program. Next year is the first midterm election of a new democratic president. Typically that would mean a pretty good year for republicans, but voters seem to be focused on the economy. That tends to be pretty good for democrats. Give me your take on the ten nor of next year's election.

McKinley: Well, first of all, I can't imagine that focusing on the economy where we are today will be good for the democrats because, frankly, we see a mess in this country in the economy and it's largely contributed have tribute to do many of the actions taken by democrats. Overspending, overgrowth of government. So I think republicans, if we can enunciate clearly what our vision is, and that's what we've been doing all summer and over the interim and we're getting a very good response from people on how we can get this economy growing again, particular until Iowa. We have more opportunity in this state to be to emerge from this economic malaise than any other state in the union, but we must do the right things.

Glover: Why?

McKinley: Why?

Glover: Why this state above others?

McKinley: Because we have high quality people who perhaps because of their closeness to agriculture know how to make and do things of the new economy, the new reality will be relying upon consumers buying things that they can touch, feel, need, and use and that's where Iowa will shine. We have to concentrate on small manufacturing and small business, which is the back bone -- should be the back bone of Iowa’s economy.

Borg: Representative Paulsen, as you convene the legislature and go your allotted time, you're going to be conducting that session simultaneously during an election campaign, particularly I want to focus on the one for governor. You're going to be electing house representatives and senators too but with a republican candidate or candidates out there before the primary campaigning against Governor Culver, how is that going to influence or detract from, maybe even assist you as republicans in the legislature?

Paulsen: I don't know that there's any impact while we're in session. Obviously once we start campaigning and get beyond Labor Day, a house raise is nine, or ten down on the ballot. What is presumably going to be the most economy competitive or high-profile race on the ticket, the governor's race, going to impact what happens to us? I think absolutely but I don't think it impacts the session.

Borg: Senator McKinley, the same question. And the crux of the economy is there are going to be republican candidates out there beating up on Governor Culver simultaneously. Is that going to assist you as republicans in what you want to achieve?

McKinley: Well, I prefer to think that they will be offering republican solutions to the many problems state faces. I don't think they'll be beating up on the democrat on Governor Culver, and I think when the final candidate emerges, I think it will be a strong candidate and they are offer a very strong republican message.

Glover: Can we should we assume that Terry Branstad, the former governor, will be the republican nominee?

McKinley: I think we have a primary to go through so we'll wait and see how that comes out. He hasn't even announced yet.

Glover: I understand that. Representative Paulsen, same question to you. Should we assume that Terry Branstad will be the republican nominee?

Paulsen: I’m not making that assumption.

Henderson: Well, let's talk about the potential of the engineer racketed back to the future ticket. Is it good for republicans to have senator Grassley at the top of the ticket and Terry Branstad running for governor in a year in which you're trying to attract new voters to the republican poll?

Paulsen: You know, I had an opportunity to meet with senator Grassley a couple weeks ago. That guy has more energy and is as bright as he ever -- you know, he ever has been. I had the opportunity sit down with former Governor Branstad. He is bright and he's ready to go and he has ideas. He's got a spirit the contest to get through for the primary but --

Glover: But the question is not whether he's bright or that Senator Grassley is bright, the question is the overwhelming majority of polling I’ve seen says this is an anti-incumbent year and republicans in an anti-incumbent election cycle are offering two veteran incumbents. How wise is that?

Paulsen: My responsibility is the Iowa House of Representatives and that is what I’m focused on. I mean I can tell you having Senator Grassley on the ticket is a help. If former Governor Branstad ends up being -- getting the nomination, I think that will be a help. I think the others could as well. I'm not getting in the middle of that primary.

Henderson: Well, Senator McKinley, you were in the middle of a primary for a little bit when you were exploring the idea of running. Do you think Grassley, Branstad top of the ticket matchup is good for your party.

McKinley: I’ll take those two any day and run candidates underneath them. I think they'll do very well. Well, we know Grassley would be on. I love being on the same ticket with Grassley.

Glover: Let's step back for a second, Senator McKinley. I'd like you to take a look at the health of Republican Party. As we mentioned earlier, the democrats have the governor's office, they have the house, they are have the senate, they have a significant leader in voter registration, they carried the state easily for president Obama in the last election. Give me your take on the health of the Republican Party.

McKinley: Well, I would tell you this, we saw elections in New Jersey and Virginia.

Glover: We're talking Iowa, Senator McKinley.

McKinley: Well, I think it's part of a national trend. We have done polling that shows that independents are swinging our way. We're seeing unprecedented number of folks that are disenchanted. We're even seeing that the registration numbers are coming back our way. So I think it will be a good year. I think there's a lot of buyers remorse on the part of people who voted for the Obama administration. We certainly know that people are very, very concerned about what's going on in Iowa and Governor Culver's reelect numbers are abysmal. So I think it's a very good year for republicans.

Glover: Representative Paulsen, the same question to you. History would tell us that this next election would be a good one pore republicans because, as I mentioned earlier, the first mid year of a democratic president. What do you get when you talk to activist voters out there? Your candidate among the most close to the electorate that we have in this state. What are they hearing?

Paulsen: I don't think there's any question there there's more energy among conservatives right now and there's more energy among republicans than I have ever seen and probably as much as in modern history. Again, going back to the point I made before, they have to know that republicans are going to be true to what we're saying and I think we're going to have an opportunity to do that as we move through this session.

Henderson: Well, what do you learn if there's more energy for republicans than every before? What do you learn from those two special elections for house seats? Which were won by democrats?

Paulsen: I learned that -- I think it reinforces that. I mean the one special election in Cedar Rapids, very lop sided district.

Henderson: In other words there were vastly more democratic registered voters in that district is what you're saying?

Paulsen: Absolutely. If you look at the one down in southeast Iowa, that was a house seat that Jim Nussle lost by 1,500 votes. It's a house seat that John McCain lost by 1,500 votes. We missed about 157.

Glover: Senator McKinley, same question to you.

McKinley: Well, what I would tell you is that the democrats that we've seen winning in these races are running as republicans. They're run on the ground lower taxes, limited government, and they say that in the home district. They say at that that in the home district, they get to Des Moines, and they vote the other way. People are beginning to catch on and that's my job as a leader is to make sure people they say one thing at home, do another in Des Moines.

Henderson: Representative Paulsen, McKinley Bailey, a democrat from Webster City is one of the six pack of democrats who joined with and you other republicans to stall and stop labor related bills that democrats had hoped to pass through the house. Is it rise ward for doing that a challenge from Stewart Iverson, the former chairman of the Republican Party, the former leader of the Iowa senate?

Paulsen: My hope is that his motivation for that vote was probably similar to mind and that is because it wasn't in the best interest of Iowa to support that bill and it wasn't in the best interest of his constituents. He stood with his constituents. That doesn't mean his constituents don't deserve an opportunity to have a choice on the ballot.

Henderson: And you're actively encouraging Stewart Iverson to run.

Paulsen: Senator Iverson and I have spoken.

Borg: Senator McKinley, earlier Representative Paulsen said that the governor's efficiency report, the consultant report to the governor, he likes. Because there are some things in there that republicans he claims have been suggesting for some time. What's your overall valuation of that efficiency report?

McKinley: Just to give you a 50,000-foot view of this because I’ve looked at it from a cursory manner, my first blush is that it appears to be things that should be ongoing, management should have been doing this all along. We never should have found ourselves in place where all of a sudden we have to say do this, management should have been doing that. Many of the -- as a matter of fact, we've done a quick analysis of the executive order. We believe that about half of those are actually not cost savings ideas at all. It's just bringing in more revenues so it will enable more spending. So we have to look at this pretty closely but it shouldn't be just to pick the can down the road. We have to do systemic fundamental reformation of the government is this is going to be long lasting and meaningful.

Glover: Representative Paulsen, the same question to you. You've had a chance to look over this report. Do you see things in there that you don't like? Do you see things in there that you do like?

Paulsen: Yes is the answer to that question. There are things in there is that we good things we like. There's other things that we are a little concerned about. Look, I think one of the things that is important to understand about that report is that the governor as put it out there, he said $128 million difference and that may very well be true from the government's perspective. That's not how republicans do the analysis. We're going to do the analysis from the taxpayers' perspective, and there's not $128 million savings to the taxpayers because manufacture those things are just accelerating tax collections and in some cases creating new ones.

Henderson: Senator McKinley, there's a review of state tax credits underway right now. As a fiscal conservative can the state afford to give businesses half a billion dollars in tax credits?

McKinley: I think that a review of tax credits is a good thing. I think we need more transparency but I would not stop at tax credits. I think we have to look at each and every program that government is involved with to see can we save in other areas. It's popular now just to look at the credits. Let's look at everything such as the I-jobs program, a $900 million borrowing scheme, is that creating jobs? We need to look at everything.

Glover: Representative Paulsen, let's go back to that this tax credit question. Let's assume that the legislation and governor go back in and they look at some of these tax credits and they decide we don't need to do this tax credit. That will be more revenue to the state. What should the state do with that revenue?

Paulsen: I think the state should use that as an opportunity to provide either some tax relief or do some tax reform. And we need to start with the property taxes that the governor has raised and is proposed to raise again by the suggestion that we reduce spending through the road use tax fund.

Glover: Specifically how would you do that?

Paulsen: Well, again, go back in and refund some of those things that he's underfunded that are getting placed on the back of the property taxpayer.

Glover: Senator McKinley, a question for you. One of the items in the governor's efficiency report was to pay for the Iowa Highway Patrol out of road use tax fund. That's something that's been -- what will the republican response to that be?

McKinley: Well, first of all, I want to say that public safety should be the number one priority. That said, in a $6.5 billion budget, the biggest budget we've ever had, we ought to be able to fund it without going into the road fund. Roads and bridges are a safety factor as well as part of the integral part of our economic development effort. We don't want to go into the road use tax fund.

Glover: Representative Paulsen, the same question to you. The suggestion is let's pay for the Iowa Highway Patrol out of the road use tax fund. It was done during the 1980 under former Governor Branstad. What's wrong with that?

Paulsen: Well, first of all, some portion of that is going to -- is allocated right now to cities and counties. When you reduce that, that means they're going to have to find alternative to see fund those different road projects or repairs that they're going to have to do and it's going to go to the back of the property taxpayer. Taking more money out of the property taxpayers pocket so that committee spend more in the general fund is anything we're going to support.

Henderson: Senator McKinley, I want you to be clear. You said you’re for more transparency in regard to these tax credits. Do you support ending any of them?

McKinley: I would have to look at each one. I think each one should be judged on its merit. And that is it improving the economy of Iowa and generally that's is it creating jobs.

Henderson: So you're holing the door open to canceling some of these?

McKinley: I think every one of them should be looked at.

Henderson: And you, Representative Paulsen? You would cancel some of them?

Paulsen: I’m not ready to identify any of today but I’m absolutely supportive of going through and making sure they're doing what the legislature intended when we passed them.

Borg: Senator McKinley, the board of regents has put off their decision on raising tuition rates by about 6 percent in state universities next year. Good idea to do that?

McKinley: Well, absolutely. And let me give you an example. They're wanting to raise tuition rates on students and yet they're putting up a new recreation center, the second recreation center, $68 million cost, it is in a flood plain and they're using student fees to do it. So we have to look at all costs and all expenses and I think we really need to look at where's the money going.

Glover: Representative Paulsen, we've only got a few seconds left, and I’d like to you quickly answer that question. Can you get Governor Culver next year?

Paulsen: Oh, I think absolutely.

Glover: Senator McKinley, same question to you. Can you get governor?

McKinley: Yes.

Glover: Iowa hasn't defected a sitting governor since 1962. Why is next year different?

McKinley: Yes, we're look at a retirement program for the governor.

Glover: And how will that work?

McKinley: That would be that the republican will defeat him.

Glover: Representative Paulsen?

Paulsen: That at that --

Glover: What's changed, I guess? Iowa hasn't defeated a sitting governor since 1962. Why is this year different?

Paulsen: Look, he came in and promised he was going to do a host of different things. He keeps saying he's going to pass a balanced budget without raising taxes and he hastily raised taxes. I think those things give him significant problems.

Borg: I’m going to have to call time.

Paulsen: Yes, sir.

Borg: Thanks for being with us today. On our next edition of Iowa Press, we're looking back on the past year convening a group of Iowa political journalists for comments on what happened and the implications for the next year. You'll be hearing perspective from both Mike Glover and Kay Henderson on this program, and Des Moines Register Political Columnist Kathie Obradovich and from Cedar Rapids, Gazette Political Writer James Lynch. Our wish to you and your family is for an enjoyable Christmas celebration and safe travel. I'm Dean Borg. From all of us here at Iowa Public Television, happy holidays and thanks for joining us today.

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